TCF Financial stepped up its commitment to minorities in the wake of the George Floyd killing and related demonstrations.
CEO Craig Dahl, who merged TCF with Detroit's Chemical Financial Corp. in 2019, on Thursday announced a $1 billion loan commitment to minority- and female-owned small businesses over five years. The company will also spend $10 million to assist lower-income home buyers during the period.
The commitment grew out of a denunciation of discrimination by Dahl and TCF Chairman Gary Torgow following Floyd's death at the hands of police in Minneapolis on May 25.
"Minority-owned and women-owned small businesses have historically had a more difficult time obtaining loans," Torgow said in a statement. "As a bank committed to strengthening individuals, businesses and communities, we are inspired to help these business owners create wealth and pursue their dreams."
In an interview, Dahl said Chemical Financial already was investing in the small-business revitalization of Detroit, and with TCF will accelerate the new loan programs.
The small-business loans of up to $1 million will focus largely on Detroit, Minneapolis-St. Paul, Chicago, Cleveland and Grand Rapids, Mich.
The home-loan program will include up to $3,000 to help cover closing costs for customers who earn less than 80% of local median income, or who purchase homes in a lower-income neighborhoods. TCF plans to fund 750 grants in 2020, compared to nearly 300 grants in 2019.
"We wanted to make sure that if we took action that we would really make a mark," said Dahl, who also works out of offices in the Twin Cities."This is not a Detroit-only initiative."
Minorities make up 80% of the Detroit population and about a quarter of the Twin Cities population. TCF runs the third-largest bank in Minnesota after Wells Fargo and U.S. Bank, both of which have also announced plans to expand lending to Black- and other minority-owned businesses.
"We recognize that access to funds for a down payment is the single largest hurdle to homeownership," Dahl said. "As communities recover from the COVID-19 pandemic, we recognize that we can make a difference."
Dahl said that TCF plans to fund the minority-loan initiative in part with revenue it made on the Paycheck Protection Plan forgivable loan program. The Small Business Administration funded the loans and paid banks a 5% fee for originating them.